Category Archive: 5) Global Macro

Germany Struggles On

The popular image of the German industrial machine politics is one which has Germany’s massive factories efficiently churning out goods for trade with the South of Europe (Club Med). Because of the common currency, numerous disparities starting with productivity differences had left the South highly indebted to the North just as the Global Financial Crisis would strike.

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What Does It Mean That Real Estate, Not Equities, Is Driving Monetary Policy?

In the world of assets classes, I don’t believe it is equities which hold the Federal Reserve’s attention. After the 2006-11 debacle, the big bust, you can at least understand why policymakers might be more attuned to real estate no matter how the NYSE trades. It may be a decade ago, but that’s the one thing out of the Global Financial Crisis which was seared into the consciousness of everyone who lived through it.

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World growth forecast revised down

Signs of a potential global recession are appearing, such as a fall in fixed investment and industrial production and a build-up in unwanted inventories. We are revising down our world growth forecast.The effects of a negative shock dating back to early 2018 are still being propagated throughout the world economy.

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Our Ruling Elites Have No Idea How Much We Want to See Them All in Prison Jumpsuits

Even the most distracted, fragmented tribe of the peasantry eventually notices that they're not in the top 1%, or the top 0.1%. Let's posit that America will confront a Great Crisis in the next decade. This is the presumption of The Fourth Turning, a 4-generational cycle of 80 years that correlates rather neatly with the Great Crises of the past: 1781 (Revolutionary War, constitutional crisis); 1861 (Civil War) and 1941 (World War II, global war).

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Monthly Macro Monitor: We’re Not There Yet

I first wrote about the current economic slowdown a year ago and Jeff Snider actually started seeing signs of slowdown in the Eurodollar market as early as May 2018. So, the slowdown we’re in now certainly isn’t a surprise here at Alhambra. I think though that we often forget how long these things take to develop.

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Globally Synchronized, After All

For there to be a second half rebound, there has to be some established baseline growth. Whatever might have happened, if it was due to “transitory” factors temporarily interrupting the economic track then once those dissipate the economy easily gets back on track because the track itself was never bothered.

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US FX intervention still someway off

The likelihood of active FX intervention by the US authorities remains low but is increasing and the Trump administration can be expected to continue to pressure the Fed to cut rates.The Trump administration has been focusing on the US’s trade deficit with some of its main trading partners such as China and Germany. A strong dollar is exacerbating this deficit and has visibly exasperated President Trump.

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China: Q2 growth lowest in decades

Downward pressure on growth persists amid ongoing trade tensions.Chinese real GDP growth came in at 6.2% year-over-year (y-o-y) in Q2, down from 6.4% in Q1, and the lowest quarterly growth in over two decades.The tertiary sector (mainly services) continued to lead growth, expanding by 7.0% y-o-y in Q2, the same as in Q1.

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Is the Fed too focused on corporates?

Fed dovishness is helping to curb financing costs for corporates but does not seem to be percolating down to the US consumer, whose debt-servicing costs are rising. This could be something to watch. The Federal Reserve (Fed)’s leading priority now is to help sustain the US business cycle, hence the concept of ‘insurance’ rate cuts put forward by Fed chairman Jerome Powell, with some echoes of Alan Greenspan’s philosophy in the 1990s.

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As Chinese Factory Deflation Sets In, A ‘Dovish’ Powell Leans on ‘Uncertainty’

It’s a clever bit of misdirection. In one of the last interviews he gave before passing away, Milton Friedman talked about the true strength of central banks. It wasn’t money and monetary policy, instead he admitted that what they’re really good at is PR. Maybe that’s why you really can’t tell the difference Greenspan to Bernanke to Yellen to Powell no matter what happens.

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Powell’s Congressional testimony sets the scene for rate cut

The Fed will likely cut rates by 25 basis points on 31 July, with a similar cut possible as early as September.During his testimony before the House of Representatives on Wednesday, Federal Reserve Chairman Jerome Powell repeated the dovish signals he gave at the Fed press conference in June, hinting at a rate cut at the next Federal Open Market Committee (FOMC) meeting on 31 July.

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“Alexa, How Do We Subvert Big Tech’s Orwellian Internet-of-Things Surveillance?”

Convenience is the sales pitch, but the real goal is control in service of maximizing profits and extending state power. When every device in your life is connected to the Internet (the Internet of Things), your refrigerator will schedule an oil change for your car--or something like that--and it will be amazingly wunnerful. 

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Hong Kong unrest

The extradition bill is 'dead' but political turmoil is not over yet.Since early June, a series of large-scale demonstrations took place in Hong Kong in protest of proposed legislation that would allow extradition of criminal suspects to certain jurisdictions, including mainland China.

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Predatory “Green Capitalism” Is Monetizing the Air, and It’s Going to Cost You

You want to reduce CO2? Then trigger a global depression that reduces global consumption of everything by 50% and destroys 95% of the phantom wealth owned by the global elites trying to monetize the air. I recently asked What's Left to Monetize?, and longtime correspondent Mark G. provided the answer: the air we breathe, via carbon taxes and markets for trading carbon credits, i.e. financializing / monetizing Nature to benefit the few at the...

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World trade and manufacturing hit by tariffs

In June, the world PMI manufacturing index recorded its second consecutive month below 50, suggesting that global manufacturing is contracting.Global manufacturing sentiment deteriorated further in June. Markit Economics’ World purchasing managers’ index for manufacturing fell to 49.4 from 49.8 in May, the second month in a row it was below the 50 threshold, suggesting that global manufacturing activity is contracting.

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When Everything from Bat Guano to Quatloos Is Soaring, Speculative Euphoria Has Reached an Extreme

The more extreme the speculative euphoria, the greater the risks of a reversal. One sentence sums up the speculative euphoria gripping markets: January and June of this year are the only months in the last 150 which have seen all assets post a positive total return. (Zero Hedge)

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Vested Interests in Charge = Guaranteed Failure

It boils down to two very simple principles: accredit the student, not the institution and teach every student how to rigorously learn on their own. Vested interests have every incentive to maintain the status quo: specifically, those who currently own the assets, income streams and power will continue to own the assets, income streams and power.

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What’s Left to Monetize?

What's left to monetize? It appears the answer is "very little." Advertising has always monetized consumers' time and attention, what we call engagement today. Newspapers and periodicals publish advertisements, radio/TV networks and stations air adverts, movie theaters run trailers/ads, billboards occupy our mental space while driving and websites and apps post adverts.

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How To Properly Address The Unusual Window Dressing

Unable to tackle effective monetary requirements, bank regulators around the world turned to “macroprudential” approaches in the wake of the Global Financial Crisis. It was mostly public relations, a way to assure the public that 2008 would never be repeated. A whole set of new rules was instituted which everyone was told would reign in the worst abuses.

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Fragile truce in Osaka

The US and China reached a ‘trade truce’ on the margins of the G20 summit this weekend, but existing tariffs remain in place. And we are only a tweet away from more Trumpian upheaval.The US and China leaders agreed on a truce during their much-anticipated meeting at the G20 summit in Osaka this weekend. Bilateral trade talks will restart.

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